EEL News Service Issue 2012/6 of 14 June 2012

The WTO Appellate Body reversed parts of the Dispute Panel’s decision of September 2012, concerning the US “dolphin-safe” label for tuna products on appeals lodged by the US and Mexico. The Appellate Body´s decisions are binding on the parties once adopted by the Dispute Settlement Body.

Even though the use of the “dolphin-safe” label is not mandatory in the US, the Appellate Body agreed with the Panel that it constitutes a mandatory technical regulation under the WTO’s Agreement on Technical Barriers to Trade (TBT). The decision diverges from that of the Panel on a number of points.

The Appellate Body reversed the Panel´s opinion that the label does not discriminate against Mexican tuna, finding that it bans only the use of “purse-seine” nets and no other fishing methods. These nets are stretched around the dolphin swarms, attracting the tuna that swim below. They are then caught by tightening the nets at the bottom. Since tuna and dolphin swarms are only found together in the Eastern Pacific, the method is used almost only by Mexican fishermen. The Appellate Body found that the label affects Mexico’s export competitiveness since it does not address the adverse effects of other, not necessarily less harmful fishing techniques used outside the Eastern Pacific by fishing fleets supplying the United States. It therefore violates Article 2.1 of the TBT Agreement.

Partly contrary to the Panel, the Appellate Body did not find the US label inconsistent with Article 2.2 of the TBT Agreement which requires that the measure in question is not more trade-restrictive than necessary to fulfil its legitimate objective. If alternative and less restrictive measures exist, the technical regulation violates Article 2.2. In this respect, the Appellate Body held that Mexico’s proposed alternative measure – a less stringent “Dolphin-Safe” Label developed under the Agreement on the International Dolphin Conservation Program (AIDCP) – does not contribute to the US objectives in a way equivalent to the current label because it brands more fishing practices potentially harmful to dolphins as safe.

The Appellate Body also held that the US label does not conflict with Article 2.4 of the TBT Agreement, which requires WTO Members to use “relevant international standards” as the basis for technical regulations as long as such standards effectively contribute to the regulation´s objectives. According to the AB, the AIDCP label proposed by Mexico does not constitute a relevant standard within the meaning of this article. Even though the AIDCP can be considered a standardizing organization, its standards are not available to the public since it only accepts new parties by invitation.

The finding that a non-binding label, used mainly for consumer information, can constitute an illegitimate technical regulation, may have significant consequences for other consumer labels, including on fair trade, genetically-modified and organic products. More clarification on the relationship between labels and market access is expected in the Appellate Body’s upcoming decision in a case concerning Certain Country of Origin Labelling (COOL) Requirements.

In its judgment, the ECJ confirmed that Article 10 of Directive 1999/31 and Articles 1 to 3 of Directive 2000/35have direct effect. Article 10 demands that Member States take measures to ensure that costs of landfill sites’ establishment, operation, and closure shall be covered by the price to be charged by the operator for the disposal of any type of waste in that site. This obligation is unconditional and sufficiently precise to have direct effect. Since the sums owed to the operator of a landfill site by a local authority which has deposited waste in the landfill, such as the sums due by way of reimbursement of a levy, come within the scope of Directive 2000/35, it follows that, in the case of late payment, the landfill operator may charge the local authority interest on those sums for which the local authority is liable.

Court rules on fair-trade tea and coffee under public procurement directive

The Court found that by requiring specific fairtrade and eco-labels in a contract notice, the Netherlands did not meet its obligations under the public procurement directive (2004/18/EG).

The Commission started proceedings against the Netherlands since it considered the fair trade label requirement in a contract notice for the supply and management of tea and coffee dispensing machines a technical specification incompatible with the directive. In 2008, the Dutch province of North Holland had published such a contract notice specifying that the tenderers should use ingredients certified with the fair-trade label “Max Havelaar” and eco-label “EKO”.

The Court recognized that member states are allowed to base the award criteria on environmental and social considerations. With respect to the fair-trade label, the province did not violate the directive since its awarding criteria referred only to the product whose supply conditions are a part of the contract’s subject matter, rather than to the general purchasing policy of the tenderers. As concerns the eco-label, its underlying criteria can be used by the contracting authorities to specify some of the sought characteristics of a product. However, under the directive, a concrete eco-label must not constitute a technical specification. Therefore, by considering only those products that use a specific label instead of allowing for other certifications that satisfy the same underlying conditions, the province formulated an award criterion incompatible with the directive.

Further, the Court determined that the requirements for the tenderers to demonstrate (1) their compliance with ‘the criteria of sustainable purchasing and socially responsible business’, and (2) their contribution ‘to improving the sustainability of the coffee market and to environmentally, socially and economically responsible coffee production’ are not sufficiently clear and precise. Accordingly, the province did not comply with the obligation of transparency set out in Article 2 of the directive.

Added to Legislation

Commission issues ETS state aid guidelines

On 22 May 2012, the Commission has published guidelineson state aid that can be offered, as from January 2013, to electro-intensive sectors facing high electricity prices as a consequence of changes to the emissions trading scheme (ETS). The guidelines aim at mitigating the impact of increased electricity costs for industries at indirect risk of carbon leakage.

Under the new rules, member states can subsidize up to 85% of the increase in power costs faced by the most efficient companies in the years 2013-2015, and 75% in 2016 – 2020. Furthermore, the guidelines envision up to 15% investment aid to highly efficient power plants, including new power plants that are carbon capture and storage (CCS)-ready, until 2020. A number of countries, including Cyprus, Estonia and Lithuania, can continue allocating free ETS allowances to power plants until 2019, under the condition that such derogation is limited to not more than 70% of emissions from domestic energy supply and that the value of the free allowances is invested in energy infrastructure and clean technologies.

Added to Air Pollution

Agreement reached on limiting sulphur content of marine fuels

On 15 May 2012, the European Parliament and Council reached an agreement on the draft Directive relating to a reduction in the sulphur content of certain liquid fuels (COM(2011)439).The new emission reduction targets bring European standards in line with Annex VI of the MARPOL Convention. Under the new directive, by 2020, the maximum sulphur content of marine fuels will be limited to 0.5% for all seagoing vessels outside designated SO2 Emission Control Areas (SECAs), compared to the current limit of 3.5% for cargo vessels and 1.5% for passenger ships. Within SECAs, including the Baltic Sea, the North Sea and the English Channel, the SOx emissions reduction target has been set at 0.1% by 1 January 2015.

Sulphur oxide gases (SOx) and particulate matter emitted during combustion of fuels with high sulphur content contribute to air pollution, causing acidification and harming human health. According to Environment Commissioner Janez Potocnik, “without this directive [SOx] emissions from shipping would, by 2020, exceed emissions from all land-based sources.

Added to Water

EEA publishes 2012 EU Bathing Water Report

On 23 May 2012, the EEA published the 2012 EU Bathing Water Report. Bathing water in Europe needs to comply with standards set in the 2006 Bathing Water Directive, which must be implemented by December 2014. The EU publishes an annual summary report on the quality of bathing water, based on reports that the Member States should submit before the end of the previous year. In this year’s report, all 27 Member States as well as Croatia, Montenegro and Switzerland monitored and reported bathing water quality, most of them according to the new provisions.

The report found that 77.1 % of sites had excellent quality, i.e. complying with the most stringent guide values, an improvement of 3.5 percentage points on last year’s data. Some 93.1 % of coastal bathing waters were classified as ‘sufficient’, or complying with the less stringent mandatory values – a 1 % increase. Less than 2 % of bathing waters were non-compliant.

Water quality at Europe’s most popular summer destinations was generally good – with more than 90 % of bathing water sites meeting the mandatory values. Spain, Italy and Portugal had more than 80 % of sites with excellent water quality. The overall quality of bathing waters in the EU has markedly improved since 1990. The number of coastal bathing waters not complying with the Bathing Water Directive’s provisions fell from 9.2 % of sites in 1990 to 1.5 % in 2011. The number of inland bathing areas not complying with mandatory values decreased from 11.9 % in 1990 to 2.4 % in 2011, which is among the lowest percentages to date.

Greenhouse Gas inventory 2010 published by the European Environment Agency

On 30 May 2012, the EEA published its Greenhouse Gas inventory 2010. The report is the annual submission of the greenhouse gas inventory of the European Union to the United Nations Framework Convention on Climate Change (UNFCCC) and under the Kyoto Protocol. According to the report, Greenhouse gas emissions increased in 2010, as a result of both economic recovery in many countries after the 2009 recession and a colder winter. Nonetheless, emissions growth was somewhat contained by continued strong growth in renewable energy sources.

G8 summit tackles short-lived climate pollutants

At its 38th summit held in May 2012 Camp David, G8 members took a decision to join the Climate and Clean Air Coalition to Reduce Short-lived Climate Pollutants. The initiative was formed in February 2012 by seven members: Bangladesh, Canada, Ghana, Mexico, Sweden, the United States, and the UN Environment Programme, pledging to take collaborative actions to reduce black carbon, methane, and hydro fluorocarbons (HFCs) emissions. Apart from reiterating this commitment, the summit declaration entrusts the World Bank to prepare a report on ways to integrate reduction of near-term climate pollution into their activities as well as to bring together experts from interested countries to evaluate new approaches to financing emission reduction projects.

Short-lived climate pollutants contribute to at least 30% of near-term global warming and are estimated to cause over 2 million of premature deaths a year. While their lifespan is much shorter than that of CO2 which remains in the atmosphere to up to 100 years, their heat-trapping properties are higher.

UNFCCC chair calls for emission reduction milestones as the Bonn climate talks grind to a halt

During the Reuters Global Energy & Environment Summitheld on 16 May, 2012 in London, the executive secretary of the UN’s Framework Convention on Climate Change (UNFCCC), Christiana Figueres, urged the countries which agreed to sign a binding agreement in 2015 to cut GHG emissions to kick off preparations already this year by adopting reduction milestones. Such efforts should be part of the Durban Platform for Enhanced Action adopted during UN climate conference in December 2011. The “Durban Platform for Enhanced Action” is a process to develop a new protocol, legal instrument or legally binding deal by 2015 which would apply to all parties under the U.N.’s climate convention and would come into force no later than 2020. Although the Durban Platform topped the agenda of the most recent UN Climate Change Conference held in Bonn on 14-25 May, 2012, little progress has been achieved on that front. Since the Durban outcome document does not set a timetable or targets for the lead-up processes, Figueres hopes for the establishment of milestones enabling the states to measure their progress.

A report dealing with the EU policy on chemicals in the light of the precautionary principle was published on the Commission’s website. It is called “Considerations on the Application of the Precautionary Principle in the Chemicals Sector” and deals with inter alia with the challenges due to the specific nature of (regulating) chemicals, and the more general nature of the precautionary principle. The Commission Communication on the precautionary principle, issued in 2000, provides general guidance, but these are not tailor-made for the application of the precautionary principle to chemicals. In the meantime, significant legal and practical developments in the field of chemicals regulation and application of the precautionary principle have occurred at the EU and national level.

The report provides a framework for applying the precautionary principle in the chemicals regulatory field. The aim is to help regulators work through the process of considering whether a substance or mixture presents the combination of concern and uncertainty about possible harmful consequences such that precautionary measures of control should be taken.

After an overview of the main points covered by the 2000 Commission Communication subsequent case law from the European Court of Justice as well as lessons learned as detailed in the academic literature are presented. A review of the stages in taking regulatory decisions on chemicals, including the essential elements of risk assessment, is presented. Concrete examples of some of the practical and political issues that may arise in considering whether to apply precautionary risk management measures are also discussed. On the basis of this background, a series of logical steps for the process of considering whether a substance or mixture is a candidate for the application of a precautionary control measure is presented. The framework is intended to help the regulator work through the issues that should be considered in determining whether the information available indicates the potential for harmful effects yet at the same time cannot fully demonstrate the risks or possible consequences. The final section discusses additional issues that need to be taken into account in the process of when and how to apply the precautionary principle within the regulatory decision process. These include documentation of the scientific evaluation as well as public consultation and stakeholder involvement.

A consultancy report published in May 2012 by the European Commission, points to a number of gaps in the scope of and overlaps with other legislation, despite a generally coherent EU’s approach to regulating chemicals.

Fifteen areas, in which clashes of legislation were identified, include the disposal of polychlorinated biphenyls and polychlorinated terphenyls (PCBs/PCTs), toys, packaging and industrial emissions, as well as the treatment of pesticides and ozone-depleting substances. As a solution, the report proposes a database searchable by substance, listing all existing restrictions. It further recommends a revision of REACH Annex XVII that sets out the list of restrictions on the manufacture, placing on the market and use of dangerous chemical substances and articles.

Among identified gaps include risk assessment of manufacturing, formulation and waste management of substances exempted from REACH registration requirements, such as plant protection-, medicinal- and biocidal products, pesticides and cosmetics. These substances are regulated through other legislation that often does not provide for the same type of detailed substance-specific risk assessment required under REACH. The report recommends an amendment of REACH so that it covers the missing stages of the risk assessment.

In force since 1 June 2007, the EU regulation on chemicals and their safe use (EC 1907/2006) deals with the Registration, Evaluation, Authorisation and Restriction of Chemical substances. It poses a requirement for chemical manufacturers to prove that their products are safe for consumers before placing them on the market. The report is part of this year’s comprehensive review of REACH by the Commission, which has further covered the work of European Chemicals Agency (ECHA), a general report from the experience in the regulation, as well as information submitted by the Member States on the operation of REACH. The resulting reviews and reports will be presented as a package by the Commission that is now finalizing its outcome document.

Added to General

Green business awards and WBCSD Conference: a case for economic growth and job creation achieved in an environmentally sustainable manner

On 24 May 2012, the winners of the European Commission-run Business Awards for the Environment were revealed in Brussels. Held every two years, the prizes are awarded in five categories to companies selected by a jury of 20 experts from EU and national authorities, businesses, academia, and R&D sector.

According to environment commissioner Janez Potocnik, the large number of applications (156) points to a growing belief that economic growth and job creation can be achieved in an environmentally sustainable manner.

The same view was the leading theme of Business for Environment (B4E) conference hosted on 22-23 May 2012, in Berlin by the World Business Council for Sustainable Development (WBCSD). The conference discussed the WBCSD’s recent report proposing an economic policy approach towards sustainable development. Participating stakeholders have called on governments to develop policies stimulating environmentally sustainable growth.

The Conference will gather leading speakers from the public and private sectors. Delegates will get the latest updates and an opportunity to discuss the recent changes to the planning system and the major challenge in meeting projected energy needs in the United Kingdom, while at the same time tackling climate change. There will be a special session on case law updates and specialist sessions on topics such as obstacles renewables and evaluation of the UK’s energy mix.

The UEP 2012 Conference will explore the possibilities of creating a healthy and livable urban environment. The agenda includes the following topics: pollution problems and possible solutions; role of the built environment in alleviating heat islands; human health problems and solutions; role of vegetation in mitigating urban pollution and human health problems; and innovative methods for alleviation of urban stress problems.